1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
ehidna [41]
3 years ago
9

On January 1, a company issues bonds dated January 1 with a par value of $240,000. The bonds mature in 5 years. The contract rat

e is 11%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $249,262. The journal entry recorded on the maturity date (after the last semiannual interest payment has been made and recorded) is:
Business
2 answers:
erica [24]3 years ago
3 0

Answer:

The journal entry on maturity is as follows:

Dr bonds payable  $240,000

Cr cash                                     $240,000

Being redemption of bonds

Explanation:

At the end of the life of the bond,the bond premium or discount would have been fully amortized,hence the only entry left to be made is to debit bonds payable account with face value of the bond and a credit of the same amount to cash account to record the outflow of cash.

The face value of the bond is $240,000,hence the $240,000 is debited to bonds payable in order to finally cancel the debt obligation.

Furkat [3]3 years ago
3 0

Answer:

Journal Entry on Maturity

Dr. Bond Payable  $240,000

Cr. Cash                 $240,000

last Interest Payment

Dr. Interest Expense                    $12,463

Dr. Premium on Bonds Payable $737

Cr. Cash                                       $13,200

Explanation:

When bond is issued over the its face value, then bond is known as issued at premium. The premium value is amortized over the life of the bond.

Interest payment = $240,000 x 11% x 6/12 = $13,200

Now calculate the bond amortization using effective interest method.

Premium amortization = $13,200 - (249,262 x 10% x 6/12) = $737

Interest Expense can be calculated as follow

Interest expense = Interest Payment - Premium amortization = $13,200 - $737 = $12,463

You might be interested in
At the beginning of the current period, Griffey Corp. had balances in Accounts Receivable of $239,000 and in Allowance for Doubt
denis-greek [22]
It’s c hopefully this helps
3 0
3 years ago
In economics a computer bought by a firm for its account keeping is classified differently to a computer bought by an individual
Nesterboy [21]

Answer:

12

Explanation:

5 0
2 years ago
The Venoid Corporation has an annual cash inflow from operations from its investment in a capital asset of​ $23,000 (excluding​
statuscvo [17]

Answer:

$80,500

Explanation:

Data provided as per the question

Capital asset = $23,000

Number of year = 5

Income tax rate = 30%

The computation of cash inflow from operations is as shown below:-

Before tax  = capital asset × number of year

= $23,000 × 5

= $115,000

Cash inflow from operations = Before tax × (1 - Income tax rate)

= $115,000 × (1 - 0.3)

= $115,000 × 0.7

= $80,500

3 0
3 years ago
Max Staxx borrowed $2,000 on a 10%, 120 day note. After 45 days, Max paid $700 on the note. Thirty days later, Max paid an addit
allsm [11]

$670 is the final balance due that max wants to pay.                                                                                  

<u>Explanation</u>:

  • Max borrowed a $2000 amount on a 120-day note. First, he paid $700 in the 120-day note. So the current amount he paid is $700.
  • After thirty days max paid the amount of $630. So totally he paid $1330 in a note of 75 days. So 45 days are remaining.
  • So the final balance due is $670. So Max wants to pay $670 on a note of 45 days.

6 0
3 years ago
T/F A company that uses tight cost controls is likely to use a low-cost leadership strategy.
VMariaS [17]
True, but may also be false depending on what "tight budget" that company wants.

Hope this helps!
8 0
3 years ago
Other questions:
  • Which of the following statements is CORRECT?
    15·1 answer
  • When a QuickBooks Online user wants to automatically apply a credit memo transaction to a customer invoice, the Automatically Ap
    7·1 answer
  • What is a company's market share?
    12·2 answers
  • What is actually considered a benefit in economics?
    12·1 answer
  • Atlas industries combines the smaller investment proposals from each operational unit into a single project for planning purpose
    8·1 answer
  • This individual worked to determine a "fair day’s work," or what an average worker could produce at a reasonable pace. This indi
    8·2 answers
  • Which of the following is an example of deregulation​? A. The price of cable TV has risen to​ $40 a month in November 2013. B. B
    14·1 answer
  • Is the grouping of jobs<br> into working units usually called<br> units, groups, or divisions.
    11·2 answers
  • Goal conflict can be avoided if budget goals are carefully designed for consistency across all areas of the organization. True F
    8·1 answer
  • Shane wants to invest money in a 6% CD account that compounds semiannually. Shane would like the account to have a balance of $1
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!